IP Update, Vol. 7, No. 2 (15 September 2009)

Editors: Marc S. Weiner, Esq. and Nicholas P. Godici

In this Issue:



USPTO Issues "Interim Examination Instructions For Evaluating Subject Matter Eligibility Under 35 U.S.C. § 101"

The USPTO has issued New Interim Patent Subject Matter Eligibility Examination Instructions to its Examiners, effective August 24, 2009. Pending a final decision from the U.S. Supreme Court in Bilski v. Kappos, these instructions will be used to determine whether the claims in a patent application are directed to patent eligible subject matter under 35 U.S.C. § 101.

Under 35 U.S.C. § 101, there are two (2) criteria for determining subject matter eligibility. The claim, as a whole under the "broadest reasonable interpretation" standard, (1) must be directed to one of the four statutory categories ((i) processes, (ii) machines, (iii) articles of manufacture and (iv) compositions of matter) AND (2) must not be wholly directed to subject matter encompassing a judicially recognized exception, such as abstract ideas, mental processes and laws of nature or natural phenomena.

A copy of the instructions can be found here.

(1)The claim must be directed to one of the four statutory categories

The four categories of statutory subject matter are (i) processes, (ii) machines, (iii) articles of manufacture and (iv) compositions of matter. Moreover, a claim that covers both statutory and non-statutory embodiments is directed to non-statutory subject matter. For example, a computer readable medium that can be a compact disc or a carrier wave is directed to non-statutory subject matter because it covers a non-statutory embodiment, i.e. a carrier wave.

(2) The claim must not be wholly directed to subject matter encompassing a judicially recognized exception

Claimed subject matter must not be wholly directed to a judicially recognized exception, such as abstract ideas, mental processes and laws of nature or natural phenomena. However, a claim can be limited to a particular practical application of a judicially recognized exception, i.e. a real world use.

(a) Machines, manufactures, and compositions of matter (products)

If a claimed product falls within one of the three product categories of invention and does not recite judicially excepted subject matter, it qualifies as eligible subject matter.

However, if judicially excepted subject matter is recited in the claim, it must be determined if the subject matter has been practically applied in the product, i.e. if the claim recites structural limitations for it to qualify as a practical application of the judicial exception. If the claim does not recite a tangible embodiment, the claim is directed to non-statutory subject matter. If a claim recites a tangible embodiment and does not cover all practical uses of the judicial exception, the claim is patent eligible. However, even if a claim recites a tangible embodiment, if it preempts all practical uses, the claim is patent-ineligible.

For example, reciting " a machine comprising . . ." without tangible limitations is not a practical application. However, a claim to a non-transitory, tangible computer readable storage medium per se that possesses structural limitations to qualify as a manufacture would be patent-eligible subject matter.

Moreover, judicially excepted subject matter claimed as descriptive material should be evaluated to determine if the material has a functional relation to the underlying structure or whether it is merely non-functional descriptive material. For example, mere data stored in memory is non-functional descriptive material and thus would not create a distinction over prior art. However, a printed circuit board or a computer programmed with executable instructions is base structure with functional descriptive material that would create a patentable distinction over prior art.

(b) Processes (methods)

For a process claim to be statutory under 35 U.S.C. 101, the claim must pass the machine-or-transformation test which ensures that the process is limited to a particular practical application. Under the machine-or-transformation test, the claimed process must (1) be tied to a particular machine or apparatus (machine implemented) OR (2) particularly transform a particular article to a different state or thing. A machine, a concrete thing, consisting of parts or devices, should clearly implement a process. For computer-implemented processes, a machine can be a general purpose computer, but to be sufficiently particular, it must be programmed to perform process steps. A transformation of a particular article means that a specific article has changed to a different state or thing. For example, electronic data has been sufficiently transformed when the nature of the data has been changed such that it has a different function or is suitable for a different use.

However, even if the claim meets the machine-or-transformation test, it must also involve more than a mere field-of-use limitation, i.e. it must impose a meaningful limit on claim scope, and must be more than insignificant extra-solution activity.

Summary provided by Charu K. Mehta

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Act of Filing a U.S. Patent Application Can Create Personal Jurisdiction in a Malpractice Case, Even When Filing was Performed Outside of U.S. Soil by a Non-U.S. Law Firm

A partner at a Canadian law firm (Defendant) prepared and filed a Canadian patent application (containing a complete copy of source code) and then filed a Patent Cooperation Treaty ("PCT") application (containing an incomplete copy of the source code) on behalf of Touchcom (Plaintiff). In order to perfect the U.S. application, the Canadian attorney further transmitted various documents to the United States Patent & Trademark Office ("USPTO") but never physically entered Virginia to prosecute Plaintiff's patent application. After Plaintiff obtained a U.S. patent based on Defendant's filing, the U.S. District Court for the Eastern District of Texas found that Plaintiff's patent was invalid for indefiniteness based on the absence of a portion of the source code. Plaintiff filed a malpractice action against the Defendant.

On August 3, 2009, a split decision of the Court of Appeals for the Federal Circuit (CAFC) reversed and remanded the district court's dismissal of Plaintiff's malpractice suit against the Canadian law firm and its attorney for lack of personal jurisdiction. The question presented in this case was whether the act of filing an application for a U.S. patent at the USPTO is sufficient to subject the filing attorney to personal jurisdiction in a malpractice claim brought in federal court. The CAFC found that the act of filing an application for a U.S. patent at the USPTO is sufficient to subject the filing attorney to personal jurisdiction in a malpractice claim brought in federal court.

The decision in was issued on August 3, 2009 and can be found here.

Summary provided by Aslan Ettehadieh

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David Kappos Sworn in as New Director of the USPTO

David Kappos was sworn in as the new Under Secretary for Commerce for Intellectual Property and Director of the USPTO on August 13, 2009, in a ceremony conducted by U.S. Commerce Secretary Gary Locke. Kappos, formerly of IBM Corporation, has over 20 years of experience in the patent field. In his speech, Kappos pledged to focus on "reducing the backlog of unexamined patent applications, cutting pendency dramatically, working off the mounting appeals backlog and improving re-exam processing - all while maintaining high quality standards." A transcript of Kappos's speech can be found here.

Kappos's transition is being assisted by Nicholas P. Godici, Executive Advisor at BSKB and former Commissioner for Patent and Acting Director of the USPTO. Mr. Godici was named a special consultant to the USPTO by U.S. Commerce Secretary Gary Locke in July 2009. Under this appointment, Mr. Godici has been working with USPTO officials to assist in the transition to the new director by identifying areas of concern and providing an up-to-date assessment of the challenges facing the office.

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Robert L. Stoll Nominated as New Commissioner for Patents

Longtime USPTO executive Robert ("Bob") L. Stoll has been nominated to the position of Commissioner for Patents by new Director of the USPTO David Kappos. The current Commissioner for Patents, John Doll, recently announced his intention to retire on October 2, 2009, after 35 years of service at the USPTO. Margaret ("Peggy") Focarino has been nominated as Deputy Commissioner for Patents. More information about the recent senior management changes at the USPTO can be found here.

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